Linking Learning Needs Analysis to Business Needs


What is the link between learning needs analysis and business needs?   How can you anticipate the training that may be required to meet the future demands of the business? How can the training professional ensure that the needs of the business are reflected in an organisation's learning and development plan? In this article Sarah Cook explores the use of company's visions, values, mission statement, objectives and performance indicators to ensure learning fulfils the organisation's needs. She also describes practical techniques that can be used to define both the internal and the external challenges facing the organisation and therefore the subsequent training and development needs.

Strategic learning needs analysis

In the previous article in this series I explained the three different types of learning needs analysis that training and HR professionals can conduct. Essentially these break down into three areas:

• Organisational or strategic needs
• Departmental or operational needs
• Individual needs

In this article I will focus on how to identify organisational / strategic learning and development needs. In order to conduct a thorough strategic learning needs analysis you will require a good awareness of what is happening or is anticipated to happen in the macro (far) and micro (near) business environment. You will need to assess how this will impact on the required skills, behaviours and knowledge of employees in the future. This analysis will help you initiate, plan and implement a learning and development plan to effectively manage business change.

Be aware of the driving forces of change

One of the certainties of organizational life is that change is constant.  Change is not limited to one event, programme or initiative.  In business today employees can expect an on-going series of boundless changes rather than discrete and controlled events.  Markets, technology and products are constantly changing: customers are becoming ever more demanding, quality and service standards are constantly going up. As a result training and development needs are also constantly changing. The strategic / organisational learning needs analysis should take account of these factors.

Training professionals need to be aware of the driving forces for change in their organisations. For example, advances in technology, particularly the internet have led to changes in buying patterns and consumers demand.  Organization such as e-Bay have grown in popularity through offering the consumer the opportunity to buy and sell according to demand.  Consumer desires and expectations are changing. Advertisers have coined the term 'kidult' to describe 20 to 35 year olds who spend hours in front of the Playstation and break all rules of age related marketing. Older consumers are becoming increasingly important to companies. Over 60s now account for 20 per cent of the UK population.  It is reckoned that over 50s control three quarters of all assets in the UK and half of discretionary consumer spending power.  Yet many consumers are time-poor. In the decade to 1996, the number of hours spent in shopping malls by the average American dropped from seven hours a month to two and a half.

The increasing development of technology and loss of cross border trade restrictions has led to the rise of globalisation and increased competition.  The Organisation for Economic Development report that cross-border mergers and acquisition and strategic alliances grew more than five fold between 1990 and 2000.  International joint ventures and strategic alliances increased by six fold during the same period.  Statistics published in November 2004 by the office of National Statistics in UK show that the volume and value of mergers and acquisitions involving UK companies has grown 14 per cent between the second and third quarter of 2004 alone. A further driver of change is deregulation.  The UK car industry, for example, has seen the withdrawal of the ?block exemption? ruling.  Prior to 2003 the E.U. allowed manufacturers in the UK the right to select and appoint approved dealerships to sell their brand of cars.  With block exemption coming to an end garages throughout the UK have the right to sell any make of car.  Deregulation has had great impact on sectors such as utilities, telecommunications and financial services in the UK.

There is a trend towards shareholders playing an increasing role in shaping the way organizations are run.  In 2003 institutional shareholders were also prepared to use their voting power to veto pharmaceutical company GlaxoSmithKline's proposed senior management remuneration increases.

There has been a fundamental shift in the psychological contract an employee has with the organization that employs them.  The term 'psychological contract' was first used in the early 1960s, but became more popular following the economic downturn in the early 1990s. It can be seen as the employee and the employers? perceptions of their mutual obligations towards each other.

Changes in the work environment include:

• the nature of jobs: more employees are on part time and temporary contracts, more jobs are being outsourced
• organizations have downsized and delayered: 'leanness' means doing more with less, so individual employees have to
  carry more weight
• technology and finance are less important as sources of competitive advantage: 'human capital' is becoming more critical
  to business performance in the knowledge-based economy
• traditional organizational structures are becoming more fluid: teams are often the basic building block, new methods of
  managing are required

All these changes affect the skills, knowledge and behaviours that are required of the effective employee. The training professional needs to take account of these changes when compiling an organisational development plan.

One useful way to categorise influences in the far or macro environment is the model PESTEL. This relates to:

• Political
• Economic
• Socio-cultural
• Technological
• Environmental
• Legal

influences that may impact your business, now or in the future. 

Political influences relate to government or constitutional policies that may affect your business. For example, potential government legislation may allow businesses to register that they do not want to receive unsolicited calls. This may restrict cold calling on a business to business basis. The recent expansion of EU boundaries may have an impact on certain businesses.

Economic influences relate to the economy as a whole. Rates of interest have an impact for example on levels of borrowing. The strength of the stock market has an impact on types of investment made.

Socio-cultural influences encompass such factors as class, age and gender as well as issues such as culture and diversity. The drinking habits of people in France are different to those in the UK.

Technological influences include the use of the internet, advances in mobile phones, Bluetooth and wireless networks, data management, customer relationship management systems etc which may have an impact on your business.

Many businesses are impacted today by environmental issues. Corporate social responsibility is now higher on the public's agenda. Organizations such as Shell and Nike have been affected by adverse publicity relating to environmental issues.

Legal constraints also affect business performance. The Working Time Directive, Paternity Leave and Minimum Wage are examples of this. In certain industries there are legal constraints imposed by regulatory or watchdog bodies.

The gaming industry is an example of one sector which has been impacted by changes in the far external environment. Traditionally betting shops such as William Hill have always been a 'horses and dogs' business. As recently as 1999 this made up 80% of its business. The proliferation of sports and topics that people can now place bets on has led to huge changes in the world of gambling.  The twin forces of technology and deregulation have also altered things. Gamblers can now place bets on the internet, via interactive TV, on wap-enabled mobile phones, via high street shops or call centers. Bookmakers are now open on Sundays and in the evenings to cater for different work and leisure patterns. There are proposals on the table to further modernize the gambling laws in this country which relate back to 1960s and license and regulate the industry. The proposed changes will impact the people agenda and hence employees' learning and development needs.

You can conduct a PESTEL review by interviewing key stakeholders in your organisation about the potential changes that will impact how your business trades, by accessing sources of industry knowledge and keeping abreast of general business trends affecting the business world and your sector in particular.

The internal (near) environment

By looking at the far environment the training professional can therefore anticipate changes and their consequences in terms of learning and development.

Within your own organisation the agenda for change will typically be identified via the planning mechanisms that are in place to establish organisational priorities.  Most organisations have an annual planning cycle.  In identifying organisational learning and development needs the HR professional should  be aware of and take account of the organisation's plans for the future. These should take into account the following organisational drivers:

• Organisational vision : This is a picture of a desired future state of the organisation that is sufficiently appealing and compelling to drive change forward. Your business's vision should set the agenda for the type of learning and development that is important to the organisation. For example, one pharmaceutical company had a vision 'to be disease's greatest enemy?. The emphasis of their learning and development strategy was around innovation and continuous improvement.

• Mission: The purpose of the organization. This is what the organisation sets out to achieve.

• Values: The underlying principles and ethics that drive the organization. One organisation with whom we work has values around customer focus, team work, professionalism and innovation. Their training and development agenda is linked to these core principles.

• Goals: The objectives or targets that the organization is trying to achieve

• Strategy: The approach that the organization is adopting to achieve the goals  that support the strategy

• Key performance indicators: The measures of success that the organisation uses to plot its performance

One organisation for example had a vision to be the organisation of choice for its customers and employees. Its mission was to provide the highest quality service. Its values were integrity, service excellence, cooperation and efficiency. It established annual goals, to:

• Increase customer satisfaction and retention by x%
• Improve employee satisfaction and retention by x%
• Improve operational efficiency by x%

It developed a strategy for achieving this and some key performance indicators to measure its success.

When a strategic learning needs analysis was undertaken by the training department, they established several learning and development needs to help employees fulfil these objectives:

• A service excellence programme aimed at all employees to increase their customer handling skills
• A leadership development programme for senior and middle managers aimed at improving their skills of motivation and leadership
• Six-Sigma training for key personnel to help improve operational efficiency

In order to best understand internal business needs the person undertaking the learning needs analysis should ensure that they gain the opinions of the key players in the organisation. By this I mean the people who shape the future strategy.

Typical questions to ask during this process are:

• What training is required?
• Why do you want this training to take place?
• What is your overall aim in undertaking this training?
• What are the expected outcome(s)?
• How does this link to the strategic plan?
• What business issues are you aiming to resolve?
• How does the training support the intended business outcome?
• What is the link to Key Performance Indicators?
• How did you become aware that there is a training need?
• Describe an example of the type of problem that is happening now
• How often does this occur?
• What evidence do you have of this?
• On a scale of 1 to 10 where 1 is low and 10 is high, how important is this training need to the business?
• What would happen if you did not address this need?
• Is the training need short, medium or long term?

SWOT analysis

Once you have undertaken an analysis of elements in the macro environment that will affect development needs as well as the internal (micro) environment best practice is to undertake a SWOT analysis. This is a helpful tool to summarise the results of the review undertaken of internal and external factors. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are internal to the organization and can be used to capture a summary of the internal audit that you have undertaken. Opportunities and threats relate to the external environment (macro and micro).  Here is a SWOT analysis for a GP's surgery:


Committed and long serving staff
Dedicated doctors
Open management style
Regular meetings
New appointment system


Inability to recruit another full time partner
Premises in need of refurbishment
Some people are reluctant to change
Lack of development for doctors and staff in clinical (CHD) and interpersonal skills


Work closer with Social Services
Clinical governance means everyone has to have a development plan
Funding from Trust to improve premises
Greater collaboration across surgeries


Increasing list size vs. number of doctors
Reluctance of newly trained doctors to enter general practice

Once the SWOT analysis was completed and agreed by key stakeholders, priorities were agreed and a learning and development plan for the whole practice was produced. This included:

• Lunch time seminars by Social Services
• Team working session with local surgeries
• Change management training
• Training in Coronary heart disease (CHD)
• Interpersonal skills development

Commercial awareness skills

In order to undertake an effective strategic learning and development analysis, the HR professional needs to hone their commercial awareness skills.

Assess your general level of business awareness using this simple self assessment tool:

Statement                                                                                                                            Yes             No

1. I can describe at least three of our competitors and state their competitive advantage 
2. I am aware of whom customers perceive as 'best in class' in our industry sector 
3. I can describe the economic, social, political and technological influences that affect our industry 
4. I am aware of future customer needs and expectations 
5. I can state the financial performance of my company and how this has altered over the past three years
6. I can read a profit and loss statement 
7. I can describe the culture of my organization
8. I can state the strengths and weaknesses of our organization
9. I am aware of future risks facing our organization 
10. I am aware of opportunities that we can take in the future as an organization
11. I look at a range of options before making a decision 
12. I make decisions in a logical fashion taking into account cause and effect
Now count the number of 'Yes' and 'No's' you have ticked.

If you have scored eight or more 'No's' then your business intelligence may need to be improved. Look over the questions again to help you asses the areas you would like to strengthen

Steps you can take to increase your business awareness

Here are some simple activities that you can undertake to increase your general commercial awareness:

• Read the business pages of a quality newspaper each day / week
• Subscribe to a magazine dealing with your industry sector
• Book yourself on to business awareness workshop such as finance for non-financial managers
• Look at competitors' websites
• Buy competitors' products
• Discuss the competitive environment with your manager
• Go out with a sales person to visit customers
• Look at the latest customer research for your organization
• Conduct a customer survey
• Mystery shop your organization
• Find out who is considered 'best practice' in your industry
• Attend business conferences
• Join a local network organization
• Gain membership of the professional body for your industry sector


In order to establish business learning and development needs the HR professional needs to undertake a review of both the internal and external environment. This will help identify the driving forces for change and the business imperatives for the future. The PESTEL and SWOT analysis is a helpful means of producing this audit. In order to be effective in undertaking strategic organisational learning needs analysis, the trainer needs to hone their commercial and business awareness skills.

Key Learning Points

• An organisational learning needs analysis needs to take into account likely changes in the macro (far environment).
  A PESTEL analysis is a helpful method of conducting a review of the external drivers of change.

• The trainer needs to take into account internal factors such as the organisation's vision, mission, values, objectives and
   key performance indicators when establishing organisational wide learning and development needs.

• In order to help in this process it is useful for the HR professional to have a good business and commercial awareness.

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